Bond covenants may constrain managers from acquiescing to union wage demands. Yet, because high wages and high levels of worker discipline are substitutes, unions can win higher wages by raising the cost of detecting slack workers. In this case, shareholders may be better off delegating to a CEO...

Purpose – This paper aims to derive insights about optimal managerial compensation and firm capital structure in unionized firms. Design/methodology/approach – This paper uses applied game theory to address problems of CEO motivation in companies with unionized workforces. Findings –...

Purpose – This paper aims to derive insights about optimal managerial compensation and firm capital structure in unionized firms. Design/methodology/approach – This paper uses applied game theory to address problems of CEO motivation in companies with unionized workforces. Findings –...